Cuba suspends consular services in the U.S. due to banking problem

MIAMI (Reuters) - Cuba suspended nearly all its consular services in the United States on Friday after it was unable to find a bank to handle the accounts of its diplomatic missions in Washington and New York, it said in a statement released to news organizations.

The decision by the Cuban Interests Section, Havana's mission in Washington, stems from its inability to find a replacement for M&T Bank Corp, which had decided to stop offering services to foreign diplomatic missions.

In a statement Cuba blamed the decision on U.S. economic sanctions against the communist-run island, saying consular services would remain closed indefinitely "until banking services are re-established."

The decision threatened to disrupt a recent surge in travel between the two countries. It could also undermine the Obama administration's "people-to-people" policy to increase Cubans' contact with compatriots living in the United States and groups of U.S. visitors licensed to visit the Caribbean island. There are still tight restrictions on general U.S. travel to the communist-run country, however.

"It has been impossible for the Interests Section to find a U.S.-based bank that could operate the bank accounts of the Cuban diplomatic missions," the Cuban Interests Section said in a news release on Friday.

Cuba briefly suspended consular services in November after it was informed by M&T that it was ending its banking services. M&T agreed to extend its deadline for deposits until February 14 for deposits, with the account to be closed on March 1.

The United States and Cuba do not have diplomatic relations but maintain lower-level interests sections in each other's capitals.

Cuba has said the United States is required under diplomatic treaties to ensure "full facilities for the performance of the functions" of its diplomatic missions and consular offices in the United States.

The United States does facilitate connections but has no ability to compel private banks to provide services, according to U.S. officials.

According to Cuban officials and U.S. diplomats, both sides have worked for months to replace M&T, but it has been difficult to find another bank because of onerous sanctions regulations and the labor-intensive mounds of small, individual consular receipts Cuba deposits.

The United States had reached out to more than 50 banks, and "several may be exploring whether to provide Cuba with banking services," according to State Department spokeswoman Marie Harf.

"We will continue to work with the Cuban mission as they seek to identify a long-term solution," she said.

Officials at Buffalo, New York-based M&T Bank did not respond to phone calls seeking comment. M&T has apparently divested all of its diplomatic accounts in recent years, and Cuba was the last one.

Cuba said consular services will still be provided "for humanitarian cases," adding that it regretted any negative impact on family visits and academic and cultural exchanges.

Around 350,000 Cuban Americans visit relatives in Cuba each year, according to travel industry estimates. Many of them must seek entry visas if they do not have a valid Cuban passport.

Cuban emigres must keep their Cuban passports up to date through the Cuban Interests Section in Washington and pay a renewal fee of $200 every two years.

An additional 100,000 Americans now travel annually to Cuba in groups organized under special people-to-people licenses that exempt them from a general ban on U.S. citizens visiting Cuba. They must obtain a tourism card from the Cuban Interests Section before traveling.

(Reporting by David Adams; Editing by Jonathan Oatis)

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